Why aren't the Valar considered gods?

In Classical Mythologies (Greek/Roman/Norse) the beings called Gods are the most powerful ones around. Their creators, if any, have been removed from the scene leaving them supreme.

In Tolkien's world, Eru is the most powerful being and is still there - and still acting such as when Gandalf is sent back from the dead. The Valar and even Morgoth all other creatures have limits imposed by Eru that cannot be evaded. Thus it makes the most sense to assign Eru the title of "God" which makes this world monotheistic, and assign titles like Angels or Demigods to the Valar, Maia, and other such beings.

Because the Valar resemble angels (servitors of a higher power) more than they do independent gods with unique desires (and the power to create what they like) as most pantheistic religions do. This does not mean they did not have independent thought or will, but their will was always second to Ilúvatar's.

There was Eru, the One, who in Arda is called Ilúvatar; and he made first the Ainur, the Holy Ones, that were the offspring of his thought, and they were with him before aught else was made. And he spoke to them, propounding to them themes of music; and they sang before him, and he was glad.

But for a long while they sang only each alone, or but few together, while the rest hearkened; for each comprehended only that part of me mind of Ilúvatar from which he came, and in the understanding of their brethren they grew but slowly. Yet ever as they listened they came to deeper understanding, and increased in unison and harmony.

And it came to pass that Ilúvatar called together all the Ainur and declared to them a mighty theme, unfolding to them things greater and more wonderful than he had yet revealed; and the glory of its beginning and the splendour of its end amazed the Ainur, so that they bowed before Ilúvatar and were silent.

Then Ilúvatar said to them: 'Of the theme that I have declared to you, I will now that ye make in harmony together a Great Music. And since I have kindled you with the Flame Imperishable, ye shall show forth your powers in adorning this theme, each with his own thoughts and devices, if he will. But I win sit and hearken, and be glad that through you great beauty has been wakened into song.'

REF: From the AINULINDALË, first chapter to The Silmarillion

• The simplest answer might be best: Because the Ainur lacked the capacity most gods have in almost any other pantheon. They could not bring things to life without Ilúvatar's blessing of Life.

The Dwarves were created in ancient times by Aulë, one of the Valar. Aulë was a smith and a craftsman and he wanted to teach his skills to the Dwarves. He made Durin first and then six others. But Eru had intended the Elves to be the Firstborn race so he commanded Aulë to put the Dwarves to sleep until after the Elves awoke. Eru gave each of the Dwarves their own souls so they could exist as independent beings. At first, when Eru had scolded Aulë for his creating the Dwarf Fathers, Aulë was going to destroy them, but Eru stopped him, noting that they now had their own souls. The Dwarves are thereby the "adopted Children" of Eru.

• This lack, more than anything else, caused the rift between Melkor and the rest of the Ainur. He wanted to create Life on his own without needing sanction from Ilúvatar.

• They were partners in the Music, but their contribution was directed and supported by Ilúvatar's will.

The short answer:

Because all the principals (Elves and First Men) were well aware that Eru Ilúvatar is the only being properly called "God"/worthy of worship/ etc.

The Ainur (those who came down into creation) were only some of the singers in the Song of Ccreation that was sung before the throne of Ilúvatar. And though they were lead by the Valar in their work (to wonder and guard-over Arda), there was never any worship given them; among themselves or by the First Born nor by the Second Born.

Each Valar has a special, and larger, part in the Song of Creation. That part is the explanation of their god-like power and spheres of influence (Ulmo and water e.g.). They sang what they were gifted to sing and further were permitted to go "down" into Arda. So in that sense they were present in the creation and had god-like powers (if you're a mortal).

Certainly there was the corruption of Morgoth, and the nature of humans, that would muddy this clear distinction in later Ages but the truth was still in common currency by the end of the 3rd Age.

I like Thaddeus' answer as an in-universe answer, but I found some evidence to support an out-of-universe answer.

It seems as though Tolkien himself never conceived of the Valar as gods, but some Elves did hold that belief in early stages of the story. The Book of Lost Tales, volume on of HoME, has a short text between two Elves called "Link between Cottage of Lost Play and Music of Ainur". It starts like this:

'But', said Eriol, 'still are there many things that remain dark to me. Indeed I would fain know who be these Valar; be they Gods?'

'So be they,' said Lindo, 'though concerning them Men tell many strange and garbled tales that are far from the truth, and many strange names they call them that you will not hear here.'

However, later on in the same text:

'Yet,' said Eriol, 'tell me, Rumil¹, I beg, some of what you know even of the first beginnings, that I may begin to understand those things that are told me in this isle².'

But Rumil said: Iluvatar was the first beginning, and beyond that no wisdom of the Valar or of Eldar or Men can go.'

'Who was Iluvatar?' said Eriol. 'Was he of the Gods?'

'Nay,' said Rumil, 'that he was not, for he made them. Iluvatar is the Lord for Always who dwells beyond the world; who made it and is not of it or in it, but loves it.'

The published editions of other works, including The Silmarillion, refer to the Valar as "the Powers". I'm not going to dig up a quote for that because there are loads, but it's clear that Tokien decided to change his terminology, even if he never thought of the Valar as "gods" in the same way Iluvatar was a god.

¹ Rumil is presented as a very ancient Noldoli, at this early stage translated as "Gnome". Christopher Tolkien's notes indicate that the Noldoli eventually became the Noldor. It's likely that Rumil learned what he knows from the Valar directly

² I believe the isle in question is Tol Eressea, but I'm not certain. I'm sourcing a crap ebook, and it's not easy to read.

In a letter to Milton Waldman Tolkien states (I have highlighted all that refers to the Valar):

The cycle begins which a cosmogonical myth: the Music of the Ainur. God and the Valar(or powers: Englished as gods) are revealed. These latter [the Valar] are as we should say angel powers, whose function is to exercise delegated authority in their spheres. They are "divine" that is where originally "outside" and ... "before" the making of the world ... On the side of mere narrative device,that is, of course, meant to provide beings ... as the "gods" of higher mythology, which.

By common definition they are gods, yet they are referred to as the Valar. This is probably because he did not won't "religion" in his works.

Edit: when Fingon was unable to save Maedhros from Angband, he decided to kill Maedhros to stop his torment, and he "cried to Menwë" to "speed now this feathered shaft". Menwë answered "his prayer ... swiftly" and sent an eagle to help them. This was the only instance I found where someone actually "prayed" to one of the Valar.

The simple answer is because there were NOT gods. There was only one god and that is Eru who is alone.

From a human or Elven perspective even the maia like Gandalf or Saruman had so much power that they could be considered gods. But when compared to Eru they were as impotent as the humans and elves seemed to them. At best the Valar could carry out the wishes of Eru. They absolutely could NOT perform any action that was in opposition to what Eru wished. They could not create. Even Melkor, despite being the strongest and trying literally the majority of his existence to create something original and in contravention to Eru's will - he could not. And that is the distinction between true god and what might be called 'Angel'; the ability to 'create' and 'sub-create'. It is a philosophical point that Tolkien describes at length in his letters.